The Canadian telco and broadcaster Shaw Communications has dropped plans to create its own mobile network and has opted instead to produce a “managed Wi-Fi network” that will allow customers to access Wi-Fi outside their homes.
Shaw said in a…
The Canadian telco and broadcaster Shaw Communications has dropped plans to create its own mobile network and has opted instead to produce a “managed Wi-Fi network” that will allow customers to access Wi-Fi outside their homes.
Shaw said in a statement that it could not justify the high-cost of building its own mobile network, arguing that the economics of the mobile business are “extremely challenging” for a new entrant.
“New entrants lack the economies of scale and scope to compete effectively against well established incumbents with ubiquitous coverage, extensive device ecosystems, deep spectrum positions and large retail networks,” it said.
It claimed that the building of a traditional mobile network would risk “well over” C$1bn (US$1.02bn) in capital expenditure.
The company gave several reasons for the switch to a new focus on Wi-Fi.
It said that major wireless carriers worldwide were deploying Wi-Fi. This allowed a reduction in network build costs and an improvement in capacity and storage.
Shaw added that, as Wi-Fi spectrum is free and there are no device subsidies, it could build extensive Wi-Fi coverage at a substantially lower cost than a traditional mobile network.
Shaw’s CEO, Brad Shaw, said: “We have decided to focus on strengthening our core business and leveraging our media and programming assets to support our leadership position in broadband and video.”
Through its various subsidiaries, Shaw currently provides DTH satellite TV, broadband, fixed-line telecoms and TV services. It also has a media content arm, which provides the Global Television network.
In a major Canadian spectrum auction in 2008, Shaw acquired 20MHz of spectrum for C$190m.
